SUPERFUND

ASHEVILLE, N.C. -- When her son was 11, Lee Ann Smith was told what no parent wants to hear: Your child has cancer.

Three years later, she braced for another diagnosis. Her younger son had developed a large bone tumor in his leg.

"I was numb," she recalled.

The tumor turned out to be benign, but it spurred Smith to search for the causes of her sons' illnesses. Her family had no history of cancer or tumors.

She focused on an abandoned electroplating facility suspected of contaminating groundwater with solvents, some of which were known carcinogens. Her boys played in the creeks behind the shuttered plant.

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Smith formed an activist group dedicated to a cleanup. And, in 2011, she and two dozen of the site's neighbors filed a lawsuit against the plant's former owner -- CTS Corp. of Elkhart, Ind. -- seeking damages and hoping to force the company to take remedial action.

"CTS needs to be hit ... where it hurts," she said. "They are not going to be compelled by human decency to do the socially responsible thing."

Their case, CTS Corp. v. Waldburger, will be heard by the Supreme Court this month. CTS is attempting to use a technical legal argument to prevent the landowners from a full trial. The company claims that Asheville residents took too long to file their claims.

The case is complicated and entangled in esoteric legal terms, so it has gone largely unnoticed by Supreme Court watchers. But it has grabbed the attention of at least one major player, the federal government, which has intervened and sided with CTS.

The Department of Justice claims it has a "substantial interest" in the precedent that could be set in the case, because it is facing nearly a dozen claims from former Marines and their families who were exposed to contaminated water at Marine Corps Base Camp Lejeune.

Thousands of Marines used water laced with toxic chemicals at the famed Jacksonville, N.C., base from 1957 to 1987. Some experts consider it the largest water contamination event in U.S. history, with veterans and their families reporting large numbers of male breast cancer and other illnesses since their time at the camp.

If CTS is successful, it could shield the Department of Defense from paying millions of dollars in claims to those families.

After her sons were diagnosed with severe health problems, Lee Ann Smith launched a local group dedicated to cleaning up the site. Photo courtesy of the POWER action group.

The Department of Justice's position in the CTS case has opened the Obama administration to criticism that it's talking out of both sides of its mouth. In 2012, President Obama signed legislation providing increased health care benefits to Camp Lejeune victims. Now, his administration is seeking to cut off their access to courts, they say.

"They are trying to use this CTS case as camouflage so that they can kill every Camp Lejeune case in the crib," said Jerry Ensminger, a Marine veteran whose 9-year-old daughter died of leukemia after spending time at the base.

"Doesn't anyone find it odd that our Department of Justice is siding with a known polluter, number one, and they are taking the side of state law over federal law? What the hell is the matter with our Department of Justice?"

Smith, 49, is an elementary school librarian from eastern Tennessee with wavy, blond hair. She speaks with a twangy drawl, calling strangers "darlin'" and describing herself as a "stubborn, hillbilly mountain girl." She readily discusses the next item on her "bucket list," an upcoming sky-diving trip.

She recalled her shock when her sons -- who have since recovered -- were diagnosed. She started investigating environmental causes of their diseases when their oncologist asked if she had ever taken her boys to Chernobyl, a Ukrainian city evacuated after a 1986 explosion at the Chernobyl Nuclear Power Plant.

After a social worker mentioned the CTS site, she zeroed in on it, even though she knows it's impossible to know precisely what caused her sons' illnesses, especially since her house is hooked to city water, not a well. Nevertheless, she launched Protecting Our Water and Environmental Resources, or POWER, a small coalition with an eight-member board aimed at forcing a cleanup. The group recently hired a technical adviser to help its efforts with U.S. EPA and CTS.

"I just wanted to make some contribution," she said. "That was going to be the silver lining of my cloud. I could make a difference in somebody else's life or situation or prevent them or their children from having to go through it."

Nestled in the Blue Ridge Mountains, CTS's facility manufactured electronic components for auto parts and hearing aids from 1959 to 1986. Part of the process included trichloroethylene, or TCE, a common industrial solvent and human carcinogen that the local groups claim was either dumped or leaked into the soil.

In 1987, the company sold about 54 acres of its property to a developer that built houses in the hills south of the plant. CTS claimed that the land was "environmentally clean."

By the early 1990s, however, neighbors said it was clear something was wrong. Multiple families who drew water from wells near the site developed significant health problems, including cancers, cysts and severe pregnancy complications. Some sued CTS and reached settlements, but CTS admitted no liability in the process.

An assessment prepared by the state concluded in January 2011 that the health of three families who used contaminated wells for up to 11 years was clearly affected, but that others were unlikely to be harmed. The report, which has since been denounced by the activists and the nonprofit Clean Water for North Carolina, also found that cancer rates for families living within a mile of the tract were not elevated.

All that’s left of a former CTS Corp. electroplating facility suspected of contaminating groundwater is a security booth that locals have vandalized. Photo by Jeremy P. Jacobs.

EPA has been monitoring the site since the 1990s and has been faulted by the community for failing to alert residents to sampling results in a timely manner. In 2007 and 2008, the agency found four wells with elevated TCE levels. The following year, another well that was originally outside EPA's monitoring network tested positive with amounts of TCE thousands of times higher than safe drinking water levels.

The agency has provided bottled water and has connected several households to city water. In 2012, EPA added the site to its Superfund program.

Less than two years after the 2009 testing results, Peter Waldburger, who lives directly next to the site, and the other landowners filed their lawsuit for damages out of frustration with both EPA and CTS for failing to take action on well-documented contamination that was harming the community.

Tate MacQueen, a plaintiff in the case who has been a vocal critic of EPA's handling of the site, said the lawsuit isn't about money.

"Why would we be suing CTS?" he said. "The natural answer is money. But we're not talking about money. We want to compel the responsible party to clean it up."

'How do you put a time period on ... cancer?'

CTS declined to comment on the case. The company's court filings, however, show that its case hinges on an obscure North Carolina provision called a statute of repose.

The concept is similar to the better-known statute of limitations, which gives an individual a time limit to file a lawsuit, starting when the injury in question occurs or when he or she becomes aware of the injury.

The statute of repose says an individual has only a certain amount of time to file from when the defendant last acted. North Carolina's statute of repose is 10 years.

CTS claims that its last action was in 1987 when it sold the property, more than a decade before the landowners filed their lawsuit.

The landowners and their attorneys counter that the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which created EPA's Superfund program for cleaning up contaminated properties, contains a provision that delays the start of that statute of repose clock.

CERCLA, they say, pre-empts, or overrules, the state's statute of repose and would allow their case to move forward into the discovery stage.

CERCLA was designed to force responsible parties to clean up their contaminated sites. After it was passed in 1980, Congress authorized a study group to examine how the law would interact with state statutes of limitations and repose.

The study group's report, released in 1982, is likely to be a key issue in the CTS case.

The report says statutes of limitations and repose could establish roadblocks to CERCLA's goal because the injuries caused by hazardous waste -- contamination and diseases like cancer -- have long latency periods. In other words, hazardous waste can cause injuries not known for 20 or more years, well beyond any statute of limitations or repose.

The report recommends that states adopt a rule under which the clock for injuries from hazardous wastes begins when the plaintiff discovers or should have discovered the disease and its cause. The report says Congress should also repeal statutes of repose that "have the same effect as some statutes of limitations in barring plaintiff's claims before he knows he has one."

In 1986, Congress updated CERCLA to incorporate the group's findings, but the amendment says "statute of limitations," not "repose."

CTS contends that the "plain language" of CERCLA does not include statutes of repose -- a line of argument likely to be welcomed by the Supreme Court's conservative textualist justices. The lawyer arguing for CTS, Brian Murray of Jones Day, is a former clerk of one of those justices, Antonin Scalia.

The Department of Justice agreed. In his amicus brief, Solicitor General Donald Verrilli says Congress "took no action with respect to state statues of repose."

Regulators have fenced off some areas near the site where groundwater sampling has revealed significantly elevated levels of toxic chemicals. Locals claim the groundwater contamination has migrated. Photo by Jeremy P. Jacobs.

"The purpose of CERCLA," Verrilli wrote, "is to promote cleanup of hazardous substances and require responsible parties to bear the costs of that cleanup, not to advantage tort plaintiffs in all respects."

Landowners contend that Congress meant for the two terms to be lumped together, noting that they are frequently used interchangeably. They point out that at the time Congress passed the CERCLA update, "Black's Law Dictionary" -- the legal industry's go-to reference book -- said "statutes of limitation are statutes of repose" and statutes of limitations are "also sometimes referred to as 'statutes of repose.'"

Further, the landowners note that Congress has never used the term statute of repose in a law.

Public health advocates, who take issue with CTS and DOJ's interpretation, say that the practical effect of the statute of repose runs counter to CERCLA's intent.

"One can't imagine the absurdity of arguing that Camp Lejeune victims should have known about their illnesses when they didn't even know about the contamination," said Angela Canterbury of the nonprofit Project on Government Oversight.

Ensminger, the marine veteran, put it another way: "How do you put a time period on a latent disease like cancer?"

Former DOJ officials, however, cautioned against reading too much into the administration brief. Justin Savage, a former DOJ environmental attorney who isn't involved in the case, said the "political considerations are minimal, if any" for the solicitor general in taking a position in a case like this.

"The solicitor general's office tends to be objectively neutral," Savage, who is now a partner at Hogan Lovells in Washington. "It's not necessarily based on a litigation interest of the U.S. It's highly nonpartisan."

He added: "The deciding factor is they just looked at the law and said this is what we believe it should be."

After the landowners lost in lower court, a divided panel of the Richmond-based 4th U.S. Circuit Court of Appeals sided with them after their case was taken up by the Wake Forest School of Law Appellate Advocacy Clinic. A third-year law student argued the case against CTS and DOJ attorneys.

Judge Henry Floyd largely agreed with the landowners' arguments and indicated that he recognized the importance of the precedent.

"Our decision here," he wrote, "will likely raise the ire of corporations and other entities that wish to rest in the security of statutes of repose, free from the threat of being called to account for their contaminated acts."

In addition to DOJ, the American Chemistry Council, American Petroleum Institute and National Association of Manufacturers, among others, have intervened in the Supreme Court case on behalf of CTS.

Plea for action

For Lee Ann Smith, CTS's legal argument is maddening and the court process, she said, only seems to delay action at the site.

She said sometimes it feels like "one step forward, two steps back" and criticized CTS for doing everything it can to avoid cleaning up the site. In addition to the Supreme Court case, the company has filed another lawsuit, in federal appeals court, challenging EPA's decision to add it to the Superfund program.

The lawsuit will be heard this week in Washington, D.C., and if CTS wins, the site would revert back to North Carolina's environmental agency.

Unlike EPA, the state can only force CTS to pay up to $5 million for cleanup activities. Taxpayers would be saddled with the rest of the bill.

Smith said all of the cases distract from the "human side" of the contaminated site.

"I teach in the elementary school every day," she said, "and I look at those children and I hope and pray none of them get sick. So for us, it's as simple as come in, get the contaminants out, stop the migration. Get it out and clean up our community."